Mobile devices have become the constant companions of today’s employees, a relationship only further cemented by the COVID-19 pandemic. But convenience brings risk. In the current economy, thieves may be trying harder to snatch technological assets. And a stolen or hacked device means hackers could gain possession of sensitive, confidential data about your company, customers and employees. To better protect your mobile tech, consider standardizing product types and operating systems. Also, enforce strict policies that include “power-on” passwords and regular password changes. Set data storage limits, limit personal use and keep security software updated as well. For more information contact us at http://ow.ly/YhJN50BFzgQ or call us at 617-651-0531.
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In some cases, investors have related expenses, such as the cost of subscriptions to financial periodicals and clerical expenses. Are they tax deductible? Currently, they’re only deductible if you can show that your investment activities rise to the level of carrying on a trade or business. In that case, you may be considered a trader, rather than an investor. A trader is entitled to deduct investment-related expenses as business expenses. A trader is also entitled to deduct home-office expenses if the home office is used exclusively on a regular basis as the trader’s principal place of business. However, be aware that trader status is difficult to achieve. For more information contact us at http://ow.ly/39aW50BEibG or call us at 617-651-0531.
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The business use of websites is widespread. But determining the proper tax treatment for the costs involved in developing a website can be difficult. The IRS hasn’t yet released formal guidance on when website costs can be deducted, so you must apply existing guidance that’s available on other costs to the issue of website development costs. The exact treatment of website design costs depends on whether they’re software or hardware and whether they’re part of a start-up business. If you hire third parties to set up and run your website, payments are currently deductible as ordinary and necessary business expenses. For more information contact us at http://ow.ly/ncs150BEhZE or call us at 617-651-0531.
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The economic impact of the COVID-19 pandemic has hurt many companies but also opened opportunities for others to expand or pivot into more profitable areas. If your business needs working capital to grow, rather than simply survive, consider a mezzanine loan. These work by layering a junior loan on top of a senior (or primary) loan, combining aspects of senior secured debt from a bank and equity-based financing from direct investors. The advantages: a relatively quick approval process and access to working capital that you may be unable to obtain elsewhere. Drawbacks include high interest rates and potential loss of ownership share if delinquency or default occurs. For more information contact us at http://ow.ly/HkFA50BEhKv or call us at 617-651-0531.
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COVID-19 has resulted in many changes in our lives, and some of them have tax implications. For example, many employers have required employees to work from home. Unfortunately, employee business expense deductions (including expenses to maintain a home office) are disallowed from 2018 through 2025. However, if you’re self-employed and work from a home office, you can be eligible to claim home office deductions for your related expenses if you satisfy the strict rules. Another tax-related situation involves people who are laid off and collecting unemployment benefits. Be aware that these benefits are taxable and must be reported on federal income tax returns for the tax year received. For more information contact us at http://ow.ly/uoEC50BEhkc or call us at 617-651-0531.
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Here are a few key tax-related deadlines for businesses and other employers during Quarter 4 of 2020. OCT. 15: If you’re the owner or operator of a calendar-year C corp. which filed an extension, file a 2019 income tax return. NOV. 2: Report income tax withholding and FICA taxes for Q3 2020 (unless you’re eligible for a Nov. 10 deadline because you deposited on time (and in full) all of the associated taxes due). DEC. 15: If a calendar-year C corp., pay the fourth installment of 2020 estimated income taxes. For more information contact us at http://ow.ly/SypO50ByZQU or call us at 617-651-0531.
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Sales staffs have been under unprecedented pressure this year. The COVID-19 pandemic triggered economic changes that made many buyers cut back on spending. With the economy slowly recovering, here are four steps your salespeople can follow to improve their odds of success: 1) Qualify prospects methodically so sales staffers focus most or all their time on those most likely to buy, 2) Ask the right questions, based on research, to identify a prospect’s specific needs, 3) Proactively identify and address objections during sales calls to eliminate unpleasant surprises at closing, and 4) Above all, present a solution that fixes a problem or helps achieve a goal. For more information contact us at http://ow.ly/rgh250BQhR9 or call us at 617-651-0531.
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As a business owner, you’re probably aware of the danger of “phishing.” This is when a fraudster sends a phony communication (usually an email) that appears to be from a reputable source but is really an attempt to get recipients to reveal sensitive information or expose their computers to malware. Ever considered trying it yourself? Many companies are intentionally sending fake emails to employees to determine how many will fall for the scams. But it’s hardly a risk-free strategy. You’ll need to budget for the costs of buying, installing and maintaining phishing simulation software. And you’ll have to consider the ethical implications of deceiving your employees. For more information contact us at http://ow.ly/VXSE50CdRdY or call us at 617-651-0531.
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You may wonder if and how disability income is taxed. It depends on who paid for the benefit. If the income is paid directly to you by an employer, it’s taxable to you as ordinary salary would be. (Taxable benefits are also subject to federal tax withholding, although they may not be subject to Social Security tax.) Sometimes, payments aren’t made by an employer but by an insurance company under a policy providing disability coverage or other insurance. In this case, the tax treatment depends on who paid for the coverage. If an employer paid, the income is taxed to you just as if paid directly to you by the employer. But if it’s a policy you paid for, the payments you receive aren’t taxable. For more information contact us at http://ow.ly/mptD50CazHd or call us at 617-651-0531.
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Unfortunately, COVID-19 has forced many businesses to shut down. If this is your situation, we’re here to assist you in any way we can, including taking care of various tax obligations. A business must file a final income tax return and some other related forms for the year it closes. If you have employees, you must pay them final wages and compensation owed, make final federal tax deposits and report employment taxes. Failure to withhold or deposit employee income, Social Security and Medicare taxes can result in personal liability for what’s known as the Trust Fund Recovery Penalty. There may be other responsibilities. For more information contact us at http://ow.ly/PsBR50C9gB4 or call us at 617-651-0531.
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Payroll recordkeeping was important in the “old normal,” but it’s even more important now as businesses continue to navigate their way through a slowly recovering economy and continuing COVID-19 pandemic. Under the “records-in-general” rule, most employers must keep information relating to federal income, Social Security and Medicare taxes for at least four years after the due date of an employee’s personal income tax return (generally, April 15) for the year in which the payment was made. A variety of data and documents fall under the rule, including employees’ personal identification data (such as Social Security numbers) and their compensation amounts. For more information contact us at http://ow.ly/LJBV50C5oJw or call us at 617-651-0531.
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When a couple is going through a divorce, taxes are probably not foremost on their minds. But without proper planning, some people find divorce to be even more taxing. Several concerns should be addressed to ensure that taxes are kept to a minimum. For example, if you sell your principal residence or one spouse remains living there while the other moves out, you want to make sure you’ll be able to avoid tax on up to $500,000 of gain. You also must decide how to file your return for the year (single, married filing jointly, married filing separately or head of household). There are other issues you may have to deal with. We can help you work through them. For more information contact us at http://ow.ly/kFho50C485o or call us at 617-651-0531.
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If you recently launched a business, you may want to set up a tax-favored retirement plan for yourself and your employees. There are several types of qualified plans that are eligible for these tax advantages: A current deduction from income to the employer for plan contributions, tax-free buildup of the value of plan investments, and the deferral of income (augmented by investment earnings) to employees until funds are distributed. The two basic types of plans are defined benefit pensions and defined contribution plans, such as 401(k) plans. There are also SEPs and SIMPLEs, which are easy to set up and maintain. For more information contact us at http://ow.ly/fiSD50C3en4 or call us at 617-651-0531.
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THU, DEC 17, 2020
FREE WEBINAR: Maximizing Year-End Tax Planning and A Look Ahead to 2021
Like every year, 2021 brings distinctive marketing trends to the table. The COVID-19 pandemic and resulting economic challenges continue to drive the conversation. You’ll need to tailor your message to this environment. For starters, digital marketing remains critical. Regularly update your search engine optimization so your website ranks highly in online searches. Adjust your use of email, text messages and social media. Look for better deals in advertising rates and for other platforms or channels. Recognize public relations as a key component to marketing success. Use press releases to disseminate trustworthy information and maintain a strong reputation. Contact us for more info.
There’s a new IRS form for business taxpayers that pay or receive certain types of nonemployee compensation and it must be furnished to most recipients by Feb. 1, 2021. After sending the forms to recipients, taxpayers must file the forms with the IRS by March 1 (March 31 if filing electronically). The requirement begins with forms for tax year 2020. Payers must complete Form 1099-NEC to report any payment of $600 or more to a recipient. February 1 is also the deadline for furnishing Form 1099-MISC to report certain other payments to recipients. There’s no automatic 30-day extension to file 1099-NEC but an extension may be available under certain hardship conditions. Contact us for help.
The tax legislation and financial landscape often change. At Dukhon Tax, we are knowledgeable about these new laws. With a clear understanding of how tax legislation changes affect you, we offer tailored tax solutions. Transaction structuring, a holistic view of your life and needs, and a focus on long-term implications are how we deliver outstanding service.
Contact us today to file your 2020 tax returns or extension. 👇
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If you have a traditional IRA or tax-deferred retirement plan account, you probably know that you must take required minimum distributions (RMDs) when you reach a certain age. Once you attain age 72 (or age 70½ before 2020), you must begin taking RMDs from traditional IRAs and certain retirement accounts. If you don’t withdraw the minimum amount each year, you may have to pay a 50% penalty tax on what you should have taken out but didn’t. In order to provide tax relief due to COVID-19, the CARES Act suspended RMDs for the calendar year 2020 but only for that one year. That means if you’re required to take RMDs, you need to take them this year or face a penalty. Contact us if you have questions.
The IRS is opening the 2020 individual income tax return filing season on Feb. 12. (This is later than in the past because of a law that was recently enacted.) Even if you usually don’t file until closer to the April 15 deadline (or you file an extension), consider filing early. It can potentially protect you from tax identity theft. In these scams, a thief uses another person’s personal information to file a fraudulent return early in the filing season and claim a bogus refund. Another benefit of early filing is that if you’re getting a refund, you’ll get it faster. And if you were eligible for an Economic Impact Payment last year and didn’t receive it, you can claim it on your 2020 return.
